Courtesy of CalPERS CalPERS, California's largest public employee pension fund, is considering cutting its earnings forecast, a move that would surely inflame a heated national debate over the cost of public employee retirement.

Actuaries for CalPERS recommended lowering the forecast by a quarter of a percentage point, conceding that investment returns are expected to be lower over the next decade, the Sacramento Bee reports.

CalPERS earnings outlook has been the subject of heated debate in Sacramento since state and local governments were forced to make up for pension fund investment losses during the recession. A Stanford study of California's pension systems' last year found that overly optimistic forecasts were concealing about $500 billion in unfunded liabilities.